Liquidity-preference theory

From CNM Wiki
Jump to: navigation, search

Liquidity-preference theory is a simple model of the interest rate, based on the ideas in Keynes's General Theory, which says that the interest rate adjusts to equilibrate the supply and demand for real money balances.

Definition

According to Macroeconomics by Mankiw (7th edition),

Liquidity-preference theory. A simple model of the interest rate, based on the ideas in Keynes's General Theory, which says that the interest rate adjusts to equilibrate the supply and demand for real money balances.
Retrieved from "https://pravka.bskol.com/w/index.php?title=Liquidity-preference_theory&oldid=50311"